Bodycote (LON:BOY) Issues Earnings Results

Key Points

• Bodycote reported a strong first half: Core organic revenue rose 9.6%, adjusted EPS increased 18.3% to £0.252, and the operating margin expanded 110 basis points to 16%, despite a 4.4% decline in automotive revenue.
• The Optimise restructuring program remains on track, with 29 of 31 planned footprint actions expected to be completed by year-end and at least £15 million in annualized benefits targeted by mid-2027.
• Full-year guidance was reaffirmed, while the company expects more moderate second-half growth; it also plans capital expenditure near the lower end of its £80 million–£90 million range and continues its £80 million share buyback.

Bodycote (LON:BOY - Get Free Report) released its quarterly earnings data on Tuesday. The company reported GBX 18.10 earnings per share for the quarter, Digital Look Earnings reports. Bodycote had a return on equity of 8.58% and a net margin of 7.55%.

Here are the key takeaways from Bodycote's conference call:

• Strong first-half performance: Core organic revenue grew 9.6%, led by Aerospace & Defense, industrial gas turbines and a recovery in medical, more than offsetting a 4.4% decline in automotive. Adjusted EPS increased 18.3% to £0.252.
• Group operating margin improved 110 basis points to 16%, supported by the Optimise restructuring program, lower-cost operations and reduced exposure to low-margin non-core activities. Management expects further Optimise benefits and volume leverage in the second half.
• Optimise remains on track, with 29 of 31 planned footprint actions expected to be completed by year-end and at least £15 million of annualized benefits targeted by mid-2027. The company is evaluating a further phase focused mainly on structurally challenged automotive operations, but acknowledged that returns may be less attractive than in the initial phase.
• Full-year guidance was reaffirmed, although second-half growth is expected to moderate because of tougher comparisons and core margins remain subject to variable-pay normalization and new-site investment costs. Capital expenditure is expected near the lower end of the previously guided £80 million–£90 million range, while the company continues its £80 million buyback and selective M&A strategy.

Bodycote Stock Performance

Bodycote stock opened at GBX 679.06 on Tuesday. The company has a market cap of £1.15 billion, a PE ratio of 21.91, a PEG ratio of 1.44 and a beta of 1.35. The company has a current ratio of 1.15, a quick ratio of 0.74 and a debt-to-equity ratio of 29.80. Bodycote has a 1 year low of GBX 566.50 and a 1 year high of GBX 850. The company's 50-day moving average is GBX 714.37 and its two-hundred day moving average is GBX 713.61.

Analysts Set New Price Targets

Separately, Deutsche Bank Aktiengesellschaft raised Bodycote to a "buy" rating and raised their price target for the company from GBX 835 to GBX 960 in a report on Thursday, May 28th. Four equities research analysts have rated the stock with a Buy rating and two have given a Hold rating to the company's stock. According to data from MarketBeat.com, the company currently has an average rating of "Moderate Buy" and an average price target of GBX 850.83.

Bodycote Company Profile

The leading provider of heat treatment and specialist thermal processing services worldwide. Heat treatment encompasses a variety of techniques and specialist engineering processes which improve the properties of metals and alloys and extend the life of components and is a vital part of any manufacturing process. Bodycote is uniquely placed via our global network and the experience and knowledge of our people to offer high quality, reliable and cost-effective services to manufacturers whatever their size or market sector.

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